How to Obtain a Gold Credit Card & Reducing Your Mortgage
This Book will teach you all they didn't
want you to know about credit, finance and debt and all that you were too
afraid to ask about!
You will discover the 'secret' time honoured and more recent techniques
that will enable you to change your life by obtaining any credit card, loan or
finance you want.
Disclaimer:-
The powerful knowledge presented in this Book is for informational
purposes only, based upon years of experience. It should not be used for any
illegal or deceptive purposes. Remember, using deception to gain credit and
finance could result in criminal action being taken against you, particularly
if the intention is to steal and not pay back your debts. The publishers of
this manual bear no responsibility whatsoever for the actions of those people
who may misuse the information.
We also accept no liability whatsoever for any consequences of any
transactions entered into by readers of the material contained within these
pages.
Although we have tried to make the information contained herein as
accurate as possible you should understand that credit practices change
continuously.
Contents
Introduction
What Is Credit & Finance?
The Basics Explained
How Do I Obtain It?
Do I Need It?
Types of Credit
Why You Should Endeavour To Pay Your Debts
Applying For Credit
What Are Lenders Looking For?
Application Forms
Credit Score
Credit History & Credit File
Credit Reference Agencies
Obtaining Your Credit File
Fixing Genuine Errors
Building Credit Worthiness
Steps You Need To Take
Necessity of Reporting To the Credit Reference
Agencies
Increasing Your Credit Card Limits
Conclusion
Appendix - Useful Tips
1.How to Obtain a Gold Credit Card
2. How to Get Your Annual Credit Card
Fee Waived
3. Very Low Interest Rate Loans Using
Credit Cards!
4. What you need to know if you’re A
Woman
5. Leaving Your Bad Credit History
Behind
6. Creating a First Class (AAA) Credit
Rating With Multiple Bank Loans - The Truth!
7. Reducing Your Mortgage - Don't Give the
Usurers Any More Money!
Introduction:-
In this Book you will learn the insider secrets and practical real world
information about credit, finance and debt, based not on hearsay and old rehashed,
outdated and unworkable ideas taken from other manuals but on years of
knowledge and experience, both personal and from friends, colleagues and
business associates. The information is based primarily on the way credit
systems operate here in the UK.
No prior knowledge of the credit system is
assumed.
The methods and ideas disclosed take time to put into operation. Look on
the process of building credit worthiness as a medium to long term venture.
What Is Credit & Finance?
The Basics Explained
Credit and finance are sums of money extended (lent) to you on the
promise that at a later date you will either pay them back plus interest or, at
the very least, just continue to pay the interest on these debts indefinitely
(called servicing the debt). The sole aim of the creditor (those who loan you the
funds) is to make a profit out of you.
This may sound obvious but many people
seem to treat the ability to obtain credit as free money. This is particularly
true where credit cards and other forms of 'revolving credit' (credit which has
to be serviced on a monthly or periodic basis by the payment of a small
fraction of the debt and / or any interest which has accrued during that
period) such as store cards are concerned.
Unfortunately, many people learn the hard way by getting into debt they
can't escape from. This can cause hardship in the short to medium term but can
be a good thing in the long run as you become much more financially aware and
knowledgeable.
How Do I Obtain It?
People who extend credit to people are known as creditors (or lenders)
and these come in an enormous variety from loan and credit card companies
through to landlords who rent out property.
However, one thing is universal. In order to obtain credit, the creditor
has to be convinced that you are capable of paying back or servicing the debt.
This is done by rating you as a possible customer by calculating what's known
as a credit score and checking your credit history i.e. they will check your status.
You will probably have seen standard credit application forms where it
says 'subject to status'.
Again, this is fairly self-evident but you would be surprised at the
number of people who automatically assume they should get credit but really
have no idea why they may be granted or refused it.
Do I Need It?
Well, most people need to be able to obtain credit at some stage or
another if only for a mortgage or a car loan. If you use the Internet to buy
things you will almost certainly need a debit or credit card.
Also, having the ability to raise funds in an emergency is very useful.
Credit cards are also essential for certain services such as car hire in
certain places. Apart from these things you could get away without actually
needing that much credit. Believe it or not, people survived quite happily
without credit in the past.
Many older people still shun the idea of using any form
of credit. However, most people and businesses take the convenience of credit
for granted, so it pays to understand why some people can obtain it and others
can't.
Interestingly, in the UK,
purchases made using credit cards are insured so that, for example, if you book
a holiday and it is cancelled due to unforeseen circumstances you can claim the
cost of the holiday back from the credit card company! This in itself is a good
enough reason to carry at least one card!
These 'charge backs', as they are
called, are one of the reasons that it is so difficult for a business to obtain
'merchant status', i.e. to allow their customers to pay with credit cards.
If
the bank that is offering the merchant account thinks the business is not
reputable then it would refuse merchant status on the grounds that it would
lose too much money from excessive charge backs.
This quirky UK
law is, however, good for the holders of credit cards!
Types Of Credit
Credit comes in many different forms, some obvious some not so obvious.
There are the obvious forms such as mortgages, loans, credit cards, store
cards, finance agreements etc. but there instances where it is not so obvious.
Debit cards are a good example. Debit cards work by debiting a sum of money
from an account, usually a current bank account, from an electronic point of
sale terminal. You would think that this is done in real time so they could check
to see if you had sufficient funds. However, there are times when it is not
possible for the terminal to connect to your bank's computers to check if there
are sufficient funds available. During these periods it has to be taken on
trust that you do have sufficient funds available. Therefore, when you apply
for one of these types of cards your 'credit status' will be checked, to see
that you are 'good' for any charges that your bank account may incur when using
your debit card. I.e. is it possible for you to go overdrawn? And if so would
you be able to pay back the sum? In the UK, the only types of debit
cards that are available to people without any credit checking are the
SOLO and VISA ELECTRON cards as these can only be used when it is possible to that you have sufficient funds available to
pay the transaction. These are the debit cards that generally come with the poor credit UK bank accounts that we
can recommend.
Other examples of credit facilities where your 'credit status' would
most likely be checked are cheque guarantee cards, insurance premiums,
utilities such as water or renting some kind of property.
However, if you are asked for permission to search a credit reference agency then you
will almost certainly be entering into some kind of credit agreement. Knowing
whether or not you are being asked to enter into some kind of credit agreement
is useful if only to save you from the disappointment (or embarrassment) of
being turned down!
Applying For Credit
What Are Lenders Looking For?
Application Forms
Whatever type of credit you apply for you will almost certainly have to
fill in an application form.
One thing you will notice immediately is that most application forms are
for all intents and purposes identical. Creditors ask for the same kind of information time and time
again.
The reason is simple. They are looking to build up as full a picture as
possible of not only your financial circumstances but also your personal circumstances.
As mentioned already, rating you as a possible customer is done by calculating
a credit score and checking your credit history.
These two distinct processes form what could be termed your overall Credit
Rating.
Credit Score
The process potential creditors use to decide whether to accept or
refuse your application for credit
is called credit scoring. The actual methods lenders use are a closely
guarded secret (to stop anyone
exploiting the system!) and are determined by computer models based on
how people in similar
personal and financial circumstances to the person applying for credit
have handled their accounts.
By comparing the information submitted on your application form to the
information submitted by
other existing or previous customers, it is possible to predict, to some
extent, how you will conduct
your account.
They will also carry out a credit check through one or both of the two
major credit reference
agencies to see if you have any adverse
credit history on your credit file.
The assessment methods are modified continuously so you could be
accepted by one company one
day only to be rejected by the same company some weeks later!
Each piece of information that you submit on the application form has a
purpose. The creditor will
use the answers you submit to decide if you are a reasonable credit risk
or not.
They will do this by assigning a weighting or 'score' to each answer you
give and then add up the
total for all the answers.
For example, if the rate of default for self-employed applicants was
found to be higher than for
employed applicants then the self-employed applicant would score less
than the employed applicant
when it came to ticking the employment status box on the application
form. The relationship
between each answer you give and it's corresponding score may not be
quite as simple as this and it
may be more important to have a combination of positive factors that
scores higher or lower.
So you could have 2 factors which each had a positive score but if you
had both factors together
then you could get a higher (or lower) score than the 2 factors added
together individually would
produce.
If your overall 'score' profile falls into a certain range then,
provided your credit history is in
acceptable order, you will be granted credit with a credit limit or loan
limit dependent on that
particular credit score plus information taken from your credit file.
Some creditors will calculate a credit
score for you then look at your credit file. Others will use and
factor in information from your credit file
as part of your score. It depends on
the particular creditor.
It should be noted that a credit
score profile that is too perfect is not
looked on favourably. It is
generally looked on with suspicion. e.g. why would a person claiming to
earn say £60,000 per year
be looking for a loan of say £1,500 to buy a second hand car? It may be
perfectly legitimate but if
the 'answers' you give look too good to be true then they may question
them.
It is not suggested that you should ever lie on your credit applications
but use common sense when
filling them in and 'mould' your answers into a form which will be more
attractive to the lender.
Some of the answers you give are easily checked but many are not.
Generally speaking, the information which is verifiable is that which is
present on your credit file
(usually address, date of birth and credit
history only) plus telephone number (i.e. they
can phone
you) plus work details if employed. Otherwise, the answers you give have
to be pretty much taken
at face value.
There is a possibility that they may phone you to discuss your
application so do keep a note of
everything you wrote on the application form. Better still, photocopy it
before submitting it! You will
find that if your credit history is acceptable then many lenders won't even bother to phone you to
check or verify your submitted details. This is particularly true of
credit card issuers. You're quite
obviously a good payer so are more likely to trust you in what you have
submitted on your
application form.
One thing that should also be noted is - There is NO FIXED score - the
methods of scoring do vary
between lenders so you could be accepted for credit with one company but
turned down with
another with exactly the same answers on your application form.
The factors which are used in calculating a credit score are typically:-
(a) Length Of Time At Present And Previous Addresses
The longer you reside at any particular address the better it is in the
eyes of any potential creditor.
It is a good indicator of personal and financial stability and allows
creditors to easily check your credit file over a period of at least two or three years.
2 (or more usually 3) years is the minimum time that lenders like to see
you at any new address without asking for a previous address. This indicates that this recent history is the period in which creditors are
mainly interested. They like to see that you haven't received any new bad credit items during this time.
If you have acquired some poor credit in the not too distant past at a previous address and have
changed address recently you can use this to your advantage by following useful tip 5.
If you have recently changed your address but you can prove that you
were at your previous
address for more than the two (or more usually three) years by, for
example, having your name
listed at your old address on the Electoral Register (or Voter's Roll as
it is sometimes known) then
this will usually be acceptable to a potential creditor. For people who
aren't on the Electoral Register
for various religious, work or political reasons (refusing to register,
for example), some lenders will
accept other proofs of residence (such as a utility bill, bank or credit
card statement) as an
alternative.
Even under ideal circumstances, it can take time to appear on the
Electoral Register at your new
address but if you have established a good positive credit history at
your previous address then this
should not present a problem when applying for credit. Potential
creditors will just need to see
something that proves your new address such as a bank statement.
Verification?
The Electoral Roll (or Register) will give the creditor all the
information and proof they need. When
applying for a credit card or loan, the minimum time that they like to
see you on the Register is two
but usually three years so they can see your credit history for this minimum period. As
pointed out
in useful tip 5, if you leave a collection of bad debts behind at one address then you
only need to be
at a new address for a couple of years before you can begin to apply for
new credit thus avoiding the
problem of having to wait for the (in our opinion) ridiculously long 6
year period for any defaults or
CCJs to disappear from your credit record. This method is particularly
relevant if the bad marks on
your credit file at your previous address have been recently obtained.
(b) Type Of Accommodation You Live In
Homeowners score more favourably than tenants or those living with
parents or relatives. You can
call yourself a homeowner if you own a property but aren't actually
living there and are renting or
living elsewhere currently.
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Verification?
Interestingly, it is not possible to verify your homeownership status
without further documentation,
so, if you say you are a homeowner, most lenders will take you at your
word (the exception being
for mortgages and secured loans).
(c) Age
People in the middle age range tend to be scored more highly. People in
this age group have been
shown to be more stable, reliable, responsible and more likely to be in
work and earning their
maximum potential salary (even though their outgoings are probably at
their peak also!).
Older people can be rejected for credit e.g. mortgages on the grounds
that they will be retired and
may not be able to keep up with repayments. However, with many
pensioners on reasonable
guaranteed incomes (with final salary pensions, for example) this may
not be such of a problem in
many cases.
Verification?
Provided you use the same date of birth on all application forms, which
will appear on your credit
file, then there is no way to verify this
unless they ask for proof of ID, which is rare, a notable
exception being the opening of a bank account. Opening a bank account in
the UK
today usually
requires you to have at least 2 forms of ID to prove identity, signature
confirmation and proof of
address. This is a result of relatively recent money laundering
regulations. As a point of interest, if
you pay £3000 or more in cash into any financial institution then the
institution has to notify the
authorities!
(d) Family Circumstances
If you have several dependent children (usually 2) then it is looked on
more favourably than having more than 2 or none at all, probably because you are considered more
responsible and less reckless if you have a couple of children.
Verification?
This is difficult to verify without further investigation.
(e) Type Of Job And Job Status
As you might expect, professional type jobs / careers score more highly
than manual / unskilled
jobs, so always make your job sound more technical / professional than
it may actually be without
actually lying.
The longer you have been with the same employer the higher your score (a
good indicator of
stability).
If you are self-employed this does not necessarily count against you,
especially if your credit file is in
good order. However, if you are applying for credit for the first time
this scores less than someone in
full time employed work.
Some lenders will automatically reject those who are self-employed for
credit cards even if your
credit history is spotlessly clean. It is just a policy decision of
those particular lenders.
Also, don't assume that because you are receiving long term state
benefits you will automatically be
turned down for credit. These benefits are long term, guaranteed and
stable and may be viewed
more favourably than the incomes of someone who is in a profession with
an unstable work pattern
e.g. acting.
Verification?
If you are employed they could simply phone your company to check
whether you work there plus
enquire about salary details / length of time with employer etc.
If you are self-employed they could again simply phone you to ask. Try,
if possible, to have a
different phone number for your 'self-employment' to your home number.
They could, of course, be
next to each other in the same location but different numbers portray a
more genuine professional
image.
(f) Income
The higher the income the higher the score. It should be remembered that
to apply for some credit
cards e.g. Gold Cards you need a minimum income of £20,000 per annum.
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Verification?
As stated previously, they could phone up your employer and simply ask.
However, if you are self employed the only way they can find out is to ask for your accounts, which is
rare for standard credit card / loan applications.
Provided you didn't submit an answer that was suspiciously large and
provided that your credit record was in good order they would
more than likely take your answer at face value. However, if you were to apply for a mortgage under such circumstances then they
would probably ask for at least 3 years accounts.
The exception to this would be if you were to
apply for a self-certification
mortgage which are increasingly common these days.
(g) Outgoings
The greater your outgoings the less disposable income you have and
therefore the lower the amount you have left to service any debt repayments. Therefore the lower your
outgoings, the higher your score.
Verification?
Lenders can only check loan and credit card accounts that are registered
on your credit file. All other declared outgoings e.g. mortgage / rent are generally taken on trust at
face value unless, of course, you are applying for credit from your mortgage lender / bank where they
can easily be checked.
(h) Bank Account
Having a bank account is good. Not having a bank account is bad. The
longer you have had the account the better. If you don't have one they may wonder why. If you
are applying for a loan then you will almost certainly need a bank account for the direct debit
repayments which is the method that banks and loan companies almost always insist on using to repay the
loan.
Verification?
If you provide a valid sort code (with bank name and address) then any
other information you provide such as an account number cannot be checked. They can check the
validity of the account number using a mathematical algorithm but generally that is all. Banks
are very fussy about giving out details of accounts and certainly won't give them out to possible
competitors. Of course, if the credit card or loan you apply for is with the same bank (or a bank
within the same group) that you
give details for then it can quite obviously be checked.
Banks that are linked include: The Woolwich and Barclays, The Halifax
and Bank Of Scotland, The
Royal Bank Of Scotland
and Natwest.
(i) Any Credit Already?
If you have credit or store card accounts already that are being used
responsibly then you will
usually be looked upon more favourably than someone who does not. The
exception to this would be
someone who has excessive numbers of cards and who is using a high
proportion of the credit
available on them. This could indicate someone who is over-stretched.
Verification?
Potential creditors can find out which credit cards (along with their
outstanding balances) you hold if
the companies that issue them report to the credit reference agencies on a
monthly basis. A few
don't unless you default on your repayments (i.e. they don't report positive (or negative)
account
history / conduct or even if an account was opened!). Potential
creditors cannot see how you have
conducted yourself with such accounts but if no defaults are shown then
they at least know that you
are managing to pay the monthly repayment. In the past we know that the
Bank Of Scotland,
American Express & Natwest didn't report positive or negative
account history but only defaults. As
credit practices change continuously and we do not have access to the
credit files of anyone who has
accounts with the aforementioned companies, it is not possible to say
what the situation is with
these particular companies at present but it is something you should be
generally aware of.
As mentioned previously, they will also incorporate factors from your credit file into calculating your
credit score. So as well as the disastrous CCJs / defaults / bad payment history that may appear on
your file, other factors will also count against you.
For example, some lenders, primarily banks, will count it against you if
you have had previous credit
with a finance company, even if your behaviour was exemplary! Don't ask
us why!
Also, too many previous credit
searches that appear on your credit file will count against you,
particularly if it shows that no account was opened (even though, as
pointed out earlier, one may
have been but wasn't reported). This may be viewed by any potential
creditor as either a sign of
desperation to obtain credit on your part or a sign of overcommitment.
You will also score more highly if the ratio of credit available on your
existing accounts to credit used
is high.
However, it will count against you if your total amount of used credit
is large in relation to your
disposable income.
If you apply for several credit cards or sources of finance don't do it
all at once. Stagger your
applications to make it look like you are considering your options in a
calm manner and not in a
manner which smacks of desperation.
In fact, any CCJs / defaults will
be so heavily weighted against you i.e. have such a negative rating
or score that you will almost without exception be turned down for
credit. We are, of course, talking
here about mainstream creditors, not those who specialise in higher risk
customers, the type which
are catered for with the cards on our entirely FREE UK poor history credit card information
page.
One factor to remember where credit facilities are concerned is that, at
periods of peak credit spending like Christmas and the pre-holiday season, access to credit
cards becomes noticeably easier. However, competition is so rife these days that credit card
companies are coming up with offers on a continuous basis in order to get your business.
Also, whenever a credit card company does a new promotion of their
credit cards do not apply to
their offer straight away as you are more likely to be refused. Figures
show that people who applied
to their offers at the beginning were more likely to default, thus they
are now more stringent in their
credit checking for those who apply early.
Another interesting fact is that 70% of those who were found to have
entered 'false' information on
their credit application forms chose to opt for payment protection
insurance.
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Credit History & Credit File
As well as calculating a credit
score, any potential creditor will also take
a look at what is known as your credit history by checking your credit file (or credit report or credit record). This is simply a history or record of all your past credit transactions which are
submitted to the credit reference agencies by the creditors that you have
dealt with in the past. Most creditors these days choose to submit their data
about your conduct to at least one agency.
The file contains your name, address, date of birth, all your good as
well as bad payment histories,
the balance of any accounts you currently have, any defaults or publicly recorded CCJs you might
have, the Electoral Register information for your particular address (to
prove who you say you are
and to prove that you live there. This is important to any potential
creditor as it proves how long you
have lived at a particular address. It also show that you are not trying
to leave bad debts behind at
another address) plus entries for credit
searches which are produced / created when a
potential
creditor checks / searches / looks at your credit file (these stay on your file for 1
year (2 yrs at
Equifax)) plus information about any
fraudulent activity that may have occurred in your name or at
your address (this could include a record of any false details that you
may have submitted on your
application forms for credit that they find out about. These are called CIFAS (credit industry fraud
avoidance system) records and stay on your file for a minimum of 1
year).
Credit Searches show who has searched your file
and for what purpose but the result of the search
is not recorded unless it is obvious from the subsequent opening of an
account on your file.
With regards to your old positive and negative credit payment account
history, entries such as
accounts which have been settled stay on your record for 6 years and if
the accounts are still open
then they just continue listing them, including when they were opened.
On your file you will see things like, for example:-
Payment history 000000000 which means that you have not been behind with
any of your
repayments for the last 9 months. Next to this you will probably also
see your account balance.
If you have not used credit in the past then all that will show up in
any particular search will be the
Electoral Roll information for your address. To the eyes of many
creditors, no credit history at all is
almost as bad as a poor one!
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Credit Reference Agencies
These are private companies whose sole purpose is keeping a track of all
your credit activity, good
and bad, at a particular address. Every time you apply for credit and a
credit check is done on you
they charge the creditor making the request. With countless millions of
personal and business
searches done every year you can see that it is big business.
In the UK
there are two main companies / organisations:-
1. Experian
www.uk.experian.com
Experian, Consumer Help Service, PO Box 8000, Nottingham NG1 5GX
2. Equifax
www.equifax.co.uk
Equifax PLC, Consumer Response Centre, Department 2E, PO Box 3001, Glasgow
G81 2DT
and a much smaller (relatively new) company:
3. CallCredit
www.callcredit.plc.uk
Consumer Services Dept, Park Row House, Leeds
LS1 5JF
These companies do not keep so-called blacklists. They simply keep a
record of all the information
that creditors pass to them regarding the conduct of your credit
commitments.
They are usually updated on a monthly basis.
As mentioned previously, not all creditors will pass ongoing / monthly
good or bad account payment
history (or even if an account was opened) to them but will only report defaults.
Also, as we pointed out previously, they also keep a record of Electoral
Register information,
repayment defaults, any publicly recorded County Court Judgments (CCJs),
credit searches and
CIFAS fraud information.
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Obtaining Your Credit File
The majority of credit checking in the UK is done via Experian. To obtain your credit file from any of
the above agencies send them a £2 cheque / PO,
simply asking them to send you your credit file.
They have to do this under the Consumer Credit Act of 1974. You can now
also apply for a copy of
your credit file online.
In about a week you will receive your credit
file for any current or previous addresses
you give them
plus they will send you a very informative brochure telling you all
about the type of information that
they keep about you and explaining what it all means.
If you only include your present 'clean' address when applying for your
credit file then the credit
reference agencies will not be able to link this current address to any
of your old 'dirty' addresses, if
any. This is assuming, of course, that a link between these addresses
has not already been
established by some other means such as a creditor you already have a
relationship with. If you
supplied all your addresses to the agencies then a link between all
these addresses would
automatically appear on your file.
Fixing Genuine Errors
When you obtain your credit file the first thing you should do is check that all the information is
100% correct. If there is even the slightest genuine error then you
should write to them and ask for
the information to be corrected. They have to reply to you within 28
days.
Of course, you can't just write to them and ask for bad items to be
removed even if you didn't know
about them e.g. a CCJ might have been issued against your name at a previous address for a
debt
you didn't know about. It is up to you to sort this out with the
creditor who obtained the CCJ against
you and then possibly pay it and have it marked as satisfied by the
County Court or apply to have it
'set aside'.
They simply report any information they have about you and it is up to
you to sort any problems out
with the relevant authorities.
It should be said that many people do have incorrect information on
their files and there are stories
of people being pursued for debts that the people who lived at the same
address before them were
liable for.
Also make sure that your credit file is not linked to anyone in your
household that it shouldn't be.
You don't want any of their bad credit history or be liable for their
debts (or others for yours).
Building Credit Worthiness
Steps You Need To Take
OK, so you've just obtained your new loan or new credit card or maybe,
for example, a finance
agreement for your new hi-fi. This means that the creditor concerned was
confident in your ability to
pay back your debts and means that your credit
file is in good order with little negative
information.
So how do you make sure that your applications will be accepted for virtually
any reasonable amount
of credit you ask for in the future?
Well, there are two very important things you must do. Firstly, keep
your credit history spotlessly
clean. It cannot be stressed strongly enough how important this is. One
late payment can spoil it.
Always make your payment as soon as you receive your statement. Ask when
your statements are
due. If you don't receive one when you think you should then immediately
send a cheque or Postal
Order (PO) to the creditor. Phone them
to ask if it's been sent out and also ask which address you
should send payments to.
Remember, some credit card companies allow you to check your accounts
online so you can easily
see when a payment is due.
We believe that some companies try to add late payment charges by
'accidentally' forgetting to send
out statements. This is particularly true on the first statement and for
those cards which are higher
risk. They know that you have very few places to go for credit and they
try to obtain the maximum
amount of profit out of you.
As they say beggars can't be choosers. This is downright criminal in our
opinion. Of course, they
would deny any knowledge of this kind of underhand practice. You have
been warned! This is yet
another incentive to keep your credit
record clean, so YOU can pick and choose who
YOU do business
with!
Necessity Of Reporting To The Credit Reference Agencies
Secondly, try to ensure that the creditor reports to the credit reference agencies on a
monthly basis
so that your good credit history can be seen by other creditors when they do future searches.
If you have a loan then this will probably be automatic. However, as
mentioned already, not all
credit card companies will report payment history information on a
monthly basis but only if you get
a default.
Nowadays, though, the majority appear to report to at least one of the credit
reference
agencies on a monthly basis.
If you wish to know which credit reference agencies a particular credit
card issuer uses then you can
simply telephone or write and ask. They are legally obliged to give you
this information.
You can always ask a credit card company to report your payment history.
Some creditors will do
this for a small fee.
Some finance agreements for smaller goods are marked as satisfied on
your credit file when your
last payment has been made.
Whatever you do, always work hard at establishing positive entries on
your credit report.
You can read about a way of adding positive credit information to any
credit file in our Special
Report 'How To Create A Brand New UK
Credit File eBook' which we give away as a free
bonus with
our bank account and prepaid credit card information services. Using this simple but generally
unknown method allows you to add a virtually unlimited amount of
positive credit history to any file.
Back To Contents
Increasing Your Credit Card Limits
Initially you may have to settle for a fairly low credit limit but this
can be increased rapidly by using
your credit card to borrow money up to it's limit every month and then
repaying the full sum at the
end of the month.
If you use your card to withdraw cash from a 'hole in the wall' (ATM)
machine you will have to pay a
small cash handling fee. However, this is a small price to pay for the
ability to increase your limit.
This way you will have virtually all of the cash to pay back into the
account.
Be careful when going up to your limit though. Unexpected charges such
as payment protection
insurance and ATM handling fees can send you over your limit, landing
you with an over limit fee
plus a less favourable reputation with the card company. Don't take out,
say, more than 95% of
your limit just to be on the safe side.
On the other hand, if you have been a good payer, they might simply
increase your limit there and
then.
The key, though, is to play it safe and straight at all times. That way
you have nothing to worry
about.
Whatever you do, if you are serious about increasing your limit then at
least always try to pay more
than the minimum (anything from 2.25 to 5% of the outstanding balance)
if you can, just to let
them see you're not crying out for money.
In time, your credit level will be increased, sometimes significantly in
a short period of time.
Frequently, your credit limit will be automatically increased by the
issuing bank.
Alternatively, you can apply to have your limit reviewed and increased
where appropriate.
Once you have a valid credit card, with a higher credit limit, you will
be amazed at how easily other
types of credit can be obtained!
Also, credit card companies seem to have a habit of matching limits. If
they see you've got a limit of
say £3000 on a card already then they will automatically give you a new
one of at least the same
limit.
If you have a lot of credit available in relation to the amount of
credit USED then creditors will look
on you favourably if you are applying for new credit (cards or loans).
It shows that you are not
simply applying for more credit out of desperation! (possibly to pay
your existing debts).
A point about Natwest cards we observed some years ago is that you can
go well over the credit
limit (by more than £1000 in one particular client's case some years
ago) if using solely Natwest
machines. They had several Natwest cards that enabled them to do this.
Now, it is not known if this
was a quirk of the system or if they simply (unofficially) relaxed our
client's credit limits!
Conclusion
As you can see there are no real 'secrets' to credit and finance. It is
simply a case of understanding
how the system works and exploiting it to maximum effect.
We hope this eBook has given you some useful advice.
Thank you for taking the time to read it.
Appendix:
Useful Tips
Useful Tip 1:-
How To Obtain A Gold Credit Card
This is an old method, as Gold credit cards are readily available these
days to anyone earning the minimum income, usually £20K per annum. However, you could still use it
to obtain offers of the more prestigious cards that banks offer:-
'If you want a Gold credit card but aren't offered one and just can't
seem to get one, then simply buy some shares in the issuing bank that offers the Gold card you are
interested in (a few hundred pounds worth of shares should suffice).
Then wait.
You should then
receive an invitation to apply for a Gold or other prestige card and provided your credit and everything
else is in reasonable shape you should receive one'.
But why worry about the colour of a card and any status it might bring?
Why pay for the privilege of a Gold Card when you can have a Platinum Card with no annual fee plus a
reasonable credit limit of at least £3500?
Useful Tip 2:-
How To Get Your Annual Credit Card Fee Waived
Some, although an ever decreasing number of, credit cards charge an
annual fee. This can be
anything from £10 up to several hundred pounds for some of the so-called
'prestige' cards.
Did you know that you may be able to get this fee waived altogether?
'Which?' magazine asked 30
readers to write to their credit card issuer, saying that they were
thinking of switching because of
the annual fee. Half of them had the fee waived immediately.
Whether or not the card company decides to waive the fee will depend on
how they value you as a
customer. If you use the card regularly, for example, you are more
likely to get the fee waived than
if you are an infrequent user.
In any event, it doesn't cost anything to try. If they won't waive the
fee, consider carrying out your
threat! There are still plenty of card issuers around who charge no fee
at all.
You may well decide that the only reason for sticking with your existing
card is force of habit. It's
perfectly possible that you will end up with lower interest rates and a
cost free card by changing
companies.
Useful Tip 3:-
Very Low Interest Rate Loans Using Credit Cards!
If you do at some stage need to carry a significant balance on your
credit cards then the smart thing
to do is transfer the balance to a new card (up to its credit limit of
course) that has a very low or
even NO interest rate balance transfer facility.
This means that you pay very low or no interest on the new card and
consequently a much smaller
amount of interest than you would otherwise pay. Using the techniques
outlined in this eBook you
should have no trouble getting these cards. This type of card facility
is a fairly recent development
and is designed primarily to encourage you to change credit card
issuers.
But you can use it to your advantage. If you have several of these cards
with reasonable limits then
you can borrow a significant amount of money at little interest for a
relatively short time by
periodically transferring the balance onto another card, after
transferring the balance of that card
onto another one in a daisy chain style. There is generally no limit to
the number of balance
transfers you can carry out, although, unfortunately, card companies are
increasingly only allowing
you to make balance transfers at no or low interest rates for a limited
period (generally up to 6
months only). Remember, of course, that if you use this method then keep
one card completely free
of a balance at any one time so you can transfer an amount similar to
its credit limit onto it.
Useful Tip 4:-
What You Need To Know If You're A Woman
If you are a woman who has been dependent on a man for most of your life
then there is a chance
that you do not have your own credit
history. This can cause problems for some
women in later life
who find themselves alone and needing to raise finance or obtain credit.
The solution is simple. Hold your own credit cards and build up your own
credit history just in case
the worst should happen.
Useful Tip 5:-
Leaving Your Bad Credit History Behind
Please note that the publishers of this Book accept no responsibility
whatsoever for the actions of readers of this section who may misuse the information contained herein
for deceptive or illegal purposes.
This section is designed simply to illustrate how the UK credit
system actually works. You should never try to evade your current credit obligations.
When you make an application for credit, lenders want to know your
previous addresses if you
haven't lived at your present address for at least 2 (usually 3) years
to check for any bad as well as
good credit history. If you have lived at your current address for this minimum length of
time then
lenders generally will not check past addresses for any bad (or good) credit history. This means that
under such circumstances, if you have any bad credit registered at your
previous address then there
is relatively little chance of the lender finding out about it unless,
of course, your past addresses
have become linked to your current address by some other means. e.g. a
creditor who you still have
an account and good relationship with who you have informed about your
change of address. The
very fact that lenders only like to see you at your current address for
this 3 year period indicates
that they are not that interested in anything that happened more than 3
years ago.
There is nothing deceptive about this as you are simply giving the
lender just the information they
require and nothing that they don't need to know about.
If you apply for credit at a new address and have been there for less
than this minimum length of time and you do not tell the lender about any
previous addresses then the lender may become suspicious and may want to check further.
They do have methods available to do this other than looking at your official
credit file held at the credit reference agencies. The main method they use is to
check with what is known as the National Hunter Database. This is a database of
details that have been submitted on past application forms by you and they may
be able to find out your previous addresses by attempting to match some
non-credit information about you such as a date of birth or telephone number.
If they did find out about your past addresses using this method and found that
you were indeed hiding something then there is a good chance that you would
obtain a CIFAS (fraud)
flag on your credit file and your old and new addresses would definitely become
linked whereas they may not have been previously. This and many other issues
relating to credit files and credit history are discussed in much greater
depth in our 'How To Create A Brand New UK
Credit File eBook'.
You might say that if I change my address and have to wait 3 years
before making any credit applications at this new address then this is not
really leaving any bad credit behind. However, considering that CCJs and defaults
are kept on the records of the credit reference agencies for 6 years,
waiting only 2 or 3 years before being able to apply for credit using your new
address ONLY is
not such a long time, particularly if the bad credit item was lodged
against you just before you
moved.
This is why appearing on the Electoral Register (to prove your address)
is so important to any
lender.
It used to be the case that, with the Electoral Register being updated
just once a year, you could
legitimately claim that you had lived at an address for up to a year
before you appeared on the
register. However, that has all changed. With the introduction of the
new rolling registration system,
which is updated monthly, this is no longer possible.
Useful Tip 6:-
Creating A First Class (AAA) Credit Rating With Multiple Bank Loans -
The Truth!
You may have seen the following or similar method of how to create a
perfect credit rating. It, or a
variation of it, appears in all the 'credit manuals':-
How to Establish First Rate (AAA) Credit in Only 45 Days
Everyone knows that the best credit anyone can have is credit at the
bank. Now you can use the bank's money to not only have credit at one bank but
to get a first class credit rating at as many banks as you wish. You should have about £500 to initiate
this plan but it can be worked with an
amount as small as £200. This is how the plan works. Take your £500 to
your regular bank, or a
bank of your choice, and open a savings account. Wait about 3 days to
make sure your account has
been credited and then apply for a loan of £500, offering to use your
savings account as collateral.
When the banker hears this they will welcome you, since this loan will
be risk-free for the bank.
There will, accordingly, be no check into your credit. Now you have £500
in your bank drawing
interest and £500 in hand. Of course, the £500 savings account is frozen
but this is of no concern to
you at this point. Take
your £500 to a second bank and open a savings account. Three days later,
go back and see the loan
officer at this bank and arrange for a £500 loan, again using your
savings account as collateral. Go
through this procedure with at least 3 other banks. You can go to as
many banks as you please with
this plan but it is best to limit the number to five at first. Later you
can always do the same at any
other banks in your area, although this probably
won't be necessary. After you have opened savings accounts at the five
banks, and obtained loans at
each of them, take the £500 from the last bank and open a checking
account at any bank you
choose. Three days later, begin writing repayment cheques. Pay one full
month's payment at each
bank at which you have taken out a loan. A week later, make another
payment to all the banks. At
this rate, you will have all your loans paid off in about 45 days. With
each payment, an equal
amount of money will be ‘unfrozen’ in your savings accounts. You can
take this money and place it in
your checking account as you go along. No matter what your previous
rating has been, you will now
have not one credit reference but five excellent ones. In fact, after
three early payments, the banks
will automatically clear you for future signature loans at their banks
and will give you a first class
credit rating at the credit reference agencies.
Helpful hints you may employ while working this plan:-
1. Always take your savings account book with you when applying for the
loans, since you will have
